Going Concern

Accounting News Roundup: GOP Has Marching Orders from Big Business; State Tax Initiative Results; GM Looking at Huge Tax Break | 11.03.10

Caleb Newquist
November 3, 2010

Business Looks to Republicans to Block Rules, Taxes [Bloomberg]
The Republican gains in Congress mean U.S. companies from Goldman Sachs Group Inc. to Wellpoint Inc. may be able to weaken or block what they consider President Barack Obama’s anti-business policies on health care, the environment, taxes and financial reform.

Republicans will use their perch as the new majority in the House of Representatives to try to eliminate funding for parts of Obama’s health care bill opposed by business as well as curb regulations and government spending, Jay Timmons, senior vice president of the National Association of Manufacturerd lobbying group, said in an interview before the election.

PwC Completes Acquisition of Diamond Management & Technology Consultants, Inc. [PR Newswire]
wC US has completed its acquisition of Diamond Management & Technology Consultants, Inc. following approval today from Diamond’s shareholders. Per the terms of the agreement, all outstanding shares of Diamond were acquired for $12.50 per share in cash.

The Complete Idiot’s Guide to Why Democrats Lost [HuffPo]
For the less-politically inclined.

With Recent Change, GAAP, IFRS Differ on How to Treat Debt [A&A Update/Compliance Week]
The International Accounting Standards Board recently finalized a change in International Financial Reporting Standards that tells companies to measure most liabilities at amortized cost, or the historical cost written down over time based on a schedule. Where a company might exercise an option to measure a liability at fair value, any changes in value would flow to equity via the “other comprehensive income” section of the income statement rather than profit and loss.

Major State Tax-Related Election Results [Tax Foundation]
Among them, Prop 19 (aka legalizing pot and taxing the hell out of it) failed.

Election 2010: What the Democratic Debacle Means for Fiscal Policy [TaxVox]
Washington is divided into two camps—those who believe divided government will open the door to compromise on tough fiscal issues, and those who don’t. Put me squarely in the second camp. We are already hearing conflicting messages from both President Obama and House Speaker-to-be John Boehner (R-OH). They give lip service to “working together” and the need for deficit reduction, but will do little of either. Here are five reasons why:

Frank reelected to 16th term [On the Money/The Hill]
But will lose the HFSC Chairmanship. Bob Herz might be enjoying this more than anyone.

GM Could Be Free of Taxes for Years [WSJ]
General Motors Co. will drive away from its U.S.-government-financed restructuring with a final gift in its trunk: a tax break that could be worth as much as $45 billion.

Knicks Postpone Home Game Before Tests Reveal No Threat From Absestos [Bloomberg]
All clear!

Quote of the Day

Wanted: Big Brothers, Big Sisters for Accountants

Caleb Newquist
November 3, 2010

One of the main reasons [for dissatisfaction] is a lack of role models. Half of female respondents said there aren’t enough women at the top to look up to in top management, while only a third of men complained that there aren’t enough males. On the topic of mentors, however, both sexes feel there aren’t enough of them. More than two thirds of both genders said they haven’t had or currently do not have a mentor to support their career. [FINS]

CFOs

Survey: CFOs Wouldn’t Turn Away Some Help with Their Clerical Work

GoingConcern
November 3, 2010

The following post is republished from AccountingWEB, a source of accounting news, information, tips, tools, resources and insight — everything you need to help you prosper and enjoy the accounting profession.

If financial executives could get one thing off their plates, it would be administrative tasks, according to a recent survey by Robert Half Management Resources.

More than one-third (38 percent) of chief financial officers (CFOs) interviewed said that if they could eliminate one responsibility, it would be basic clerical and administrative work.

“Today’s less extends to all levels of the organization,” Paul McDonald, senior executive director of Robert Half Management Resources, said of the survey results.

“At small and mid-size companies, in particular, this often means financial executives have had to take on tasks once handled by others,” McDonald said. “The demands of the current economic environment make it even more essential for senior-level managers to use their time wisely.”

CFOs were asked, “If there was one responsibility you could hand off from your job, what would it be?”

• Basic clerical/administrative – 38%
• Accounting-related – 19%
• Human resources-related – 14%
• Managing – 7%
• Operations-related – 3%
• Interactions with vendors – 1%
• Nothing – 8%
• Other – 10%

The survey was developed by Robert Half Management Resources, a provider of senior-level accounting and finance professionals on a project and interim basis. It was conducted by an independent research firm and includes responses from 795 CFOs from a stratified random sample of U.S. companies with 20 or more employees.

Robert Half Management Resources offers executives six tips for maximizing their time:

1. Set realistic expectations – High standards are a must, but setting impractical goals can cause frustration and waste valuable time. When initiating a project, consider what you would like to achieve if resources and time were unlimited. Then determine what can reasonably be accomplished considering available resources and other priorities.

2. Don’t procrastinate – It’s tempting to postpone less challenging assignments for more exciting initiatives, but it can backfire if projects start to stack up. Procrastination strains working relationships and creates unnecessary stress as everyone strives to catch up.

3. Delegate – Distribute more routine tasks to other staff members. Look for opportunities that allow your top performers to gain visibility and build their expertise and decision-making skills.

4. Keep meetings on track – Distribute a detailed agenda prior to the discussion so everyone is prepared. Meetings should begin and end on time. If information can be easily covered in e-mail or phone, a meeting might not be warranted.

5. Bring in help – If you and your team are overloaded, consider bringing in outside support during peak activity periods or for large-scale initiatives that are finite in nature.

6. Recharge – Financial executives are accustomed to long hours and demanding work, but that doesn’t mean they should sacrifice breaks and vacation. Scheduling time for even a short respite can restore energy and a sense of control.

About Robert Half Management Resources:
Robert Half Management Resources is a provider of senior-level accounting and finance professionals to supplement companies’ project and interim staffing needs. The company has more than 145 locations worldwide and offers online job search services at www.roberthalfmr.com. Follow Robert Half Management Resources at twitter.com/roberthalfmr for workplace news.

KPMG

Unhappy KPMG Employees Need to Quit Making Excuses

Caleb Newquist
November 2, 2010

Like every company out there, KPMG has its share of unhappy people. It’s unavoidable when people are working long hours, have random employees emailing colleagues and your boss’s alma mater can’t field a decent football team.

But it was recently brought to our attention that despite the Kranky Klynveldians out there, KPMG was recently recognized by Forbes as one of America’s Happiest Companies.

Yes, it’s true! The list is alphabetical but it only features ten companies so you know this isn’t one of those catch-all lists that just gets thrown together. Seriously, the firm is on their with Google and Zappos, two of the most notoriously nauseatingly gleeful companies on the planet.

But why is KPMG one of the hap, hap, happiest? Simple. It comes down to education. From Forbes’s list:

[The Company] [i]nvests in happiness training; allows employees to take partially paid leaves for up to 12 weeks; encourages flexible scheduling and formal mentoring programs.

So the bottom line is that if you work at KPMG and you’re unhappy, you’ve got no one to blame but yourself. Money be damned. Get your ass to happiness training, take copious notes and you’ll be whistling to work in no time.

Ernst & Young: Hedge Funds Like Us! They Really Like Us!

Caleb Newquist
November 2, 2010

A source informs us that this is hardly surprise as E&Y has some the best known shops as clients including SAC Capital, Third Point, Anchorage Capital Partners, Reservoir Capital Group and Pershing Square. Although the HF honchos still appreciate the recognition:

“Receiving this award is a testament to Ernst & Young’s 25-year commitment to serving hedge funds through every phase of their business – from starting up through investment, global expansion and going public,” said Art Tully, Co-leader, Global Hedge Fund Practice, Ernst & Young LLP. “Since we began serving the alternative investments industry more than two decades ago, our seasoned professionals have worked to help hedge fund clients anticipate and meet new regulatory, transactional, accounting, tax, technology, operations and investor demands.”

“Ernst & Young’s hedge fund practice was founded on start-ups. In 2009, we audited the most significant share of the top 25 fund launches in 2009,” said Mike Serota, Co-leader, Global Hedge Fund Practice, Ernst & Young LLP. “As these organizations continue to evolve and expand, we can support their evolving needs through our extensive portfolio of services.”

E&Y is two for two in Hedge Fund Manager Week’s Best Accounting Firm Category so it’s a little early for any “dynasty” rhetoric but they seem to have a decent hold on things.

Some People Are Wondering When/If KPMG and Ernst & Young Will Ante Up

Caleb Newquist
November 2, 2010

From the mailbag, courtesy of an E&Y senior associate:

I work for EY. Roommates are Deloitte and PWC. I’m hearing from the PWC employees that in addition to a holiday bonus, as well as a March compensation adjustment similar to Deloitte’s, PWC is also giving their employees the last two weeks of December off without requiring them to use their vacation days.

Thoughts on whether EY or KPMG will ante up? Hot topic at my client site today as you can imagine 🙂

Before we get to E&Y and KPMG, it should be noted that PwC is really playing hardball here. A quick recap:

• Mid-year bonuses that include an option for an iPad. Steve Jobs hater or not – that’s a cool bonus.

• Rumors of poaching seniors in Chicago and New York.

• New Yorkers given the option to shovel Thanksgiving sustenance at a Manhattan location to be named later (btw, we really want to know where, so get in touch with details when known).

• iPhones are now available and Christmaskuh festivities return.

Now there are rumors of a merit increase in March and two free weeks of time off? This is quite the run of employer gratitude. We won’t say “unprecedented” but it is an impressive show of generosity.

Maybe PwC has gone on this offensive because they had a kick-ass first quarter. Or maybe it’s because they lost the number one spot to Deloitte and they still want everyone to know that they’re still capable of equating love with money. OR maybe they’re trying to make people forget about Logogate. Whatever the motivation, the firm is throwing money around with the gusto of Charlie Sheen and they are getting a relative amount of attention for it.

Now, then – Ernst & Young and KPMG. Maybe these two firms are spreading the wealth on the Double-DL but if not, TPTB have to be aware of the what the competition is up to. If not, maybe someone should clue them in. Regardless, there has to be heat to act in some way.

One explanation for the House of Klynveld is that the fiscal year just ended, so it is too early for leadership to communicate “the great first quarter,” thus rationalizing a mid-year bonus. If KPMG comes out to soon with the news, they risk the “Monkey see” effect.

As far as E&Y is concerned, we’re stumped. They have the same fiscal year as PwC and should have a pret-tay good idea how Q1 went. Now that PwC has made the first move, any action by E&Y is going to look reactionary .

So for the E&Y and KPMG crowd – you clearly have some expectations for something but are you hearing anything about mid-year bonuses or will the belly aching continue into the holidays? Discuss below and get in touch with details.

News

The Guy Responsible for Informing Us About Christine O’Donnell’s Pubic Hair Was an Auditor at the Federal Reserve

Caleb Newquist
November 2, 2010

We’re just catching up to this little twist in the story so keep your pieholes shut. Plus, it’s election day, making it completely appropriate.

Hard to believe that it was just last Thursday when the anonymous first-hand account of a sexless one-night stand with Senate candidate Christine O’Donnell was published over Gawker, grooming details included.

Aside from Christine O’Donnell’s stance on masturbation, witchcraft and her inability to assign anyone to fill out a postcard for her nonprofit organization, we could have done without this particular exposé. An anonymous douche probably thought he would make off with Gawker’s ‘low four figure’ sum and he would be an anonymous anti-tea party hero.

The Smoking Gun immediately was on the case to identify the pube peeker in question and it really didn’t take much effort on their part, as they came to a pretty solid conclusion late on Thursday after speaking with the author’s former roommate, Brad Kursiko:

While Kurisko refused to out “Anonymous,” some online activity this evening may point to the author’s identity. Shortly after his last phone conversation with a TSG reporter, a single name disappeared from Kurisko’s list of Facebook friends.

The man with whom electronic ties were abruptly cut is Dustin Dominiak, a 28-year-old buddy who attended Albion College with Kurisko. Records show that Dominiak has previously shared a Philadelphia address with Kurisko. One online posting reports that Dominiak, a Michigan native, has worked as an auditor at the Federal Reserve in Philadelphia.

TSG finally got Kurisko to confirm Dominiak as the blathering broheim, thus providing him with the unenviable distinction of being “that guy who wrote about Christine O’Donnell’s pubes.” Especially if she manages to pull off the huge upset today.

But more interestingly this whole story has only reiterated our contention that the sex lives of accountants (and by extension, auditors) is completely random and scattered. This particular encounter – Senate candidates and their grooming habits; Philly Fed auditors that will do anything for a buck – might be the apex of the theory.

On The Trail Of “Anonymous,” Christine O’Donnell’s Sex-Free Pal [TSG via DI]

CPA Exam

Will You Need New CPA Exam Materials In 2011?

Adrienne Gonzalez
November 2, 2010

As many of you know, some parts of the CPA exam are changing significantly in 2011 though don’t listen to the rumors that say everything is changing profoundly. If you sit for the exam before 2010 and sit again in early 2011, chances are you will recognize much of the content and format of the exam beyond the few changes. We’ve covered those here before, feel free to check out our previous CPA exam posts for more detail.

Anyway, a lot of you are wondering if you should purchase CPA exam review materials now and if you do how you will handle the new material in 2011.

If you’ve done your homework, you’ve found a CPA review course that offers updated material at no additional charge. This could be in the form of split shipments, updates to books or new books altogether depending on whose program you have sunk your hard-earned money into. If you are unsure whether your course offers these or if you are still shopping around for a review, be sure to ask before committing as some providers could end up charging you for new materials.

Keep in mind, however, that much of what is being tested currently will still be tested in 2011, even in areas like FAR and AUD that are getting a significant amount of new international material added to them. If you read too many misinformed forum posts, you might be under the impression that 2010 material is completely and totally irrelevant in 2011 and that studying from these materials will mean guaranteed failure on the exam. That is simply not true. Of course it is a good idea to also study from whatever updates you might receive to 2010 materials if you are sitting in 2011 but it is not worth panicking over nor delaying your studying because you are holding out for brand new 2011 information.

The AICPA Board of Examiners is not about to throw away their precious bank of tried and true CPA exam questions, even though they are anxious to add new international content to that mix. Much of what CPAs have been tested on for the last 6 years will still be relevant next year and there is no need to hold a giant 2010 CPA review book bonfire to eliminate old, outdated content.

You will definitely want to get access to any material updates if you are allowed them by your review course but please, don’t burn books or run out and get all new materials just because you are afraid of being left behind in 2011. Debits still go on the left, even under IFRS.

News

(UPDATE) Accountants to Watch on Election Day 2010

Caleb Newquist
November 2, 2010

~ Update includes the Michigan Governor’s race.

Here’s a rundown of some of the more prominent races that feature accountants. All of the polling information cited is the calculated average from Real Clear Politics.

• Wisconsin – Republican Ron “There are two many lawyers in the Senate” Johnson leads incumbent Democrat Russ Feingold by approximately 7 points.

• South Carolina – In the Governor’s race, Republican Nikki Haley’s tardy tax filings have not hurt her prospects as she leads Democrat Vincent Sheheen by approximately 11 points.

• New York – Incumbent Senator Kirsten Gillibrand leads Republican Joe DioGuardi by approximately 20 points. For those not familiar with DioGuardi, he is an Arthur Andersen alum who made partner at age 31, was the first practicing CPA elected to Congress and is the father of Kara DioGuardi (ask the person next to you if you don’t know).

• Virginia – Republican Keith Fimian (spent 7 years at KPMG) is in a toss-up race against Democrat incumbent Gerry Connolly in Virginia’s 11th Congressional District.

• Michigan – Republican Gubernatorial candidate Rick Snyder (Coopers & Lybrand alum who made partner in six years) leads his Democratic opponent Virg Bernero by approximately 17 points.

So it looks as though your bean counter brethren will win at least ~~two~~ three races (Haley, Johnson, Snyder) with one certain defeat and one that’s too close to call.

If we’ve missed any accountants-cum-candidates in a Congressional or Gubenatorial race, let us know below or shoot us an email and we’ll update the post. Now go vote.

Accounting News Roundup: Skilling Wants Conviction Overturned; Deloitte Survey: Half of Internal Auditors Lack Adequate Staff; Addressing Fair Tax Hype | 11.02.10

Caleb Newquist
November 2, 2010

Skilling Pursues Case to Overturn His Conviction [DealBook]
On Monday, Mr. Skilling’s lawyers traveled to Houston to argue before a three-judge panel of a federal appeals court that his conviction should be overturned as a result of the Supreme Court’s ruling. The argument took place in the same courthouse where Mr. Skilling and his colleague Kenneth L. Lay were convicted more than four years ago. Mr. Skilling’s wife and brother (the popular Chicago weatherman Tom Skilling) attended the hearing, according to Bloomberg News.

Terror Trade Tax []
The Terror Trade Tax, as I would name the required additional spending on cargo inspection, will, on the margin, raise costs and therefore discourage trade. It might also raise costs more for exports from countries deemed most suspect, but recall that this package, if not found, might have blown up a plane flying from London to the United States. Had it exploded over the Atlantic, it might have been impossible to know where the package originated.

Officer breaks ‘little’ accountant’s arm, but no charges laid [Toronto Star]
Accountant abuse in Toronto.

Employee-Benefit Costs Concern CFOs Most [Real Time Economics/WSJ]
A new survey of 508 U.S. chief financial officers and senior comptrollers find far more of them (84%) worried about rising employee benefit costs than worried about rising raw material (27%) or energy costs (21%).

The survey found 30% are planning on reducing health-care benefits in the coming year, 23% are planning on reducing bonuses and 18% are planning on reducing stock options or equity based compensation. The survey was conducted by Grant Thornton LLP during the first half of October.

Shortage of internal auditors to fight fraud [Accountancy Age]
A little more than half of internal auditors say they have too few staff to deal with fraud. The research in Deloitte’s first Fraud Survey also concludes that a fifth of those polled said their companies had no formal fraud policy. More than 60% said their vulnerability to fraud had increased in the past 18 months.

Poll: CEO pay needs reform [On the Money/The Hill]
“The corporate governance provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act focused on policies such as ‘say on pay’ and ‘clawbacks,'” said PwC partner Catherine Bromilow in prepared remarks. “Our survey uncovered other areas that may go further to address CEO pay. As compensation issues continue to be a concern, boards will be well-served by closely examining their compensation policies and how their rewards link to company performance.”

Fair Tax Isn’t Just a Bad Tactic; It’s a Bad Idea [Tax Update Blog]
Joe Kristan sheds light on the fair tax hype.

The Tax Increase No One’s Talking About [TaxVox]
The stimulus bill (the American Recovery and Reinvestment Tax Act of 2009) provided $287 billion in tax cuts for 2009 and 2010 but most provisions expire at the end of this year. (Congress extended some of the business tax cuts during the summer.) The big kahuna is the Making Work Pay credit—nearly $60 billion a year going to most workers—but partial exemption of unemployment compensation, expansion of EITC and education credits, and greater refundability of the child credit deliver nearly $20 billion more. Taxes will jump for more than 95 percent of Americans when those cuts evaporate come January.

Quote of the Day

Handicapping Ernst & Young

Caleb Newquist
November 2, 2010

Ernst & Young, take my word for it, will never be indicted by the U.S. government, as a firm, for its role in any Lehman fraud that’s eventually proven. It’s also highly unlikely – 1000 to 1 odds I’d say – EY will be fined by the SEC or the PCAOB, as a firm, in a civil or disciplinary case.

~ Francine McKenna says it’s a longshot.

After Tomorrow, a Bunch of Losers Will Have to Quit Their Pouting and Come Up with Some Tax Policy Solutions

Caleb Newquist
November 2, 2010

Lots of those losers will be Democrats. And if they feel like sticking it to the rich one last time, at least they can say a Reagan OMB Director and Bill Gates are on their side!

[via TaxProf]

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